Foreign investment is being seen as a way to revive the sluggish economy, particularly with stagnating domestic purchasing power and GDP expected to grow by just 3% this year.
The Interior Ministry said this month that it will resurrect a measure to allow foreigners to own one rai of land (roughly 0.16 hectares) for residence if they invest 40 million baht in Thailand.
There are mixed feelings towards this scheme, with a similar proposal failing to come to fruition when it was first suggested in 1998 amid the financial crisis.
The Federation of Thai Industries (FTI) believes the plan to allow foreigners to own a plot of land would be a new economic stimulus, especially benefiting the gradually recovering tourism sector.
New economic booster
"The plan will be good for the economy and investment in the long term because wealthy foreigners, notably businesspeople, will enjoy a long stay here after their retirement," said Kriengkrai Thiennukul, chairman of the FTI.
Domestic tourism operators will benefit if the plan can attract more foreigners.
Thailand is among the world's major tourist destinations. The country is rich with natural resources such as beaches and coastlines, and the cost of living is not too high, said Mr Kriengkrai.
He does not think the plan to allow foreigners to buy land would lead to serious problems.
"One rai is not much. This should not harm national security," said Mr Kriengkrai.
The FTI said it would help and support real estate businesses which were affected by the impact of the Covid-19 pandemic and the Russia-Ukraine war.
Prices of energy and raw materials, notably steel, have increased during the ongoing conflict between the two countries.
A property executive who requested anonymity said many Thais might disagree with the government's attempt to attract affluent foreigners by granting them full land ownership of one rai for residential use.
"It's good that the government wants to boost the economy by attracting foreign investment," said the executive.
"Thailand is very attractive among foreigners. They want to stay here as our medical services are good, the cost of living is low, the food is superb, and we have a lot of international schools for their children."
However, some locals think it is unfair to them, as many still cannot afford to buy property.
"The issue regarding less ownership of land among Thais doesn't logically correlate with the policy to allow land ownership for foreigners. International buyers are required to spend over 40 million baht to own a one-rai plot of land and a house. That price is not mass market for Thais," said the executive.
However, he suggested there should be regulations related to the incentives, such as a requirement to sell back the property to a Thai buyer if a foreigner wanted to sell the land.
"If we want to use these incentives to drive the economy, we should make sure there's a measure to contain the amount of ownership whenever it becomes too large," said the executive.
Wallaya Chirathivat, president and chief executive of developer Central Pattana Plc, said the government should adopt other measures to boost the economy via foreign investment.
Granting long-term land leasing for 30 years, 60 years or 90 years to a foreigner, instead of full ownership, might be a better policy which would also create an economic impact, she said.
"This remains a sensitive issue among Thai people," said Ms Wallaya. "The government must ensure that most locals can afford to have their own house before launching such a measure. There are still many local people that want to buy a house. Additional aid for locals, such as mortgage loans, may help them."
However, other proposed measures to increase the quota of foreign ownership in a condo project to more than 49%, which is the current threshold, could be implemented but with a careful approach.
Nipon Poapongsakorn, a distinguished fellow at the Thailand Development Research Institute, said the plan to allow foreigners to own land would be expected to attract only overseas capital looking for short-term gains.
"I personally see the potential land purchase of only one rai by foreign investors as just for speculative purposes," he said.
"What Thailand needs right now is not a stack of short-term foreign capital, but long-term investment, startups and service development to support the country's economic development in the long run," he said.
"The Eastern Economic Corridor scheme is currently the only selling point to draw foreign investment, unlike Vietnam which boasts much clearer investment stimulus strategies and promotes overseas investment in several areas nationwide."
Thailand's efforts to promote investment in the provinces are also limited as the country still lacks adequate infrastructure there.
Infrastructure development plans remain controlled by the central government, said Mr Nipon.
According to Mr Nipon, the costs of doing business remain relatively high, making Thailand less attractive to draw foreign investment.
Visit Limlurcha, honorary president of the Thai Food Processors Association, said the scheme may help stimulate the country's economy in the longer term.
He said that once foreigners are legitimately allowed to own land, they may expand their investment into other businesses and provide know-how to local people.
According to the Real Estate Information Center (REIC), Thai residential property remains popular among foreigners. This is particularly the case amongst the Chinese, who had a 45% market share in foreign condo ownership in the first quarter of 2022, despite a year-on-year decline in the number of condo units transferred to them.
"The decrease was caused by a difficulty to travel to Thailand," said REIC's acting director-general Vichai Viratkapan.
"As soon as China eases travel restrictions, Chinese buyers will definitely come back," he said.
Recently, more Chinese buyers have chosen houses over condos, particularly luxury single detached houses, which they own through a Thai company, said Wongsakorn Prasitvipat, managing director of Property Perfect Plc.
"But these Chinese buyers already have a house or a business in Thailand," he said.
During 2018-20, the number of condo units transferred to foreigners totalled 34,653 units, worth a combined 145.6 billion baht.
The top five nationalities included the Chinese, who mainly own condo units in Bangkok, Chon Buri and Samut Prakan, according to REIC.
In the first quarter of 2022, Bangkok and Chon Buri were the most popular places where condo units were transferred to foreigners, with 829 units (39%) and 677 units (32%), respectively.
The other three provinces included Samut Prakan (230 units), Phuket (164 units), and Chiang Mai (97 units).
The top five provinces for Chinese buyers were Bangkok (51%), Chon Buri (22%), Samut Prakan (19%), Chiang Mai (4.8%), and Phuket (1.5%).
For Russians, the top locations were Phuket (55%), Chon Buri (39%), Prachuap Khiri Khan (4.5%), and Rayong (1.5%).
Americans chose to buy in Chon Buri (58%), Bangkok (15%), Chiang Mai (11%), Phuket (8%), and Samut Prakan (2.6%).